Why Insiders Are Dumping This Top AI Stock — and How It Could Crash 50%

Nvidia (NASDAQ: NVDA) has been the crown jewel of the AI boom, driving massive returns with its powerful GPUs at the center of AI innovation. However, a concerning trend has emerged: company insiders are consistently selling shares even as the stock soars. According to The Motley Fool, Nvidia executives have offloaded more than $700 million worth of shares in 2024 alone.

While insider selling isn’t always a red flag, consistent and significant sales often indicate that those closest to the business might not expect the meteoric growth to continue. Analysts warn that Nvidia’s stock, currently priced at a steep premium—over 30 times sales—could be extremely vulnerable if broader market conditions sour. In a severe market downturn, Nvidia’s valuation could come back to earth, with potential declines of 50% or more.

Despite Nvidia’s strong leadership in AI, investors should tread carefully. Even the best growth stories can unravel quickly if expectations reset, and the heavy insider selling suggests management is aware of the risks ahead.